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20130103
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the pentagon and hard. as you see there, the defense stocks moving a little bit higher today including northrop grumman and lockheed martin. in los angeles with a look at what the deal means at least for two months for the sector, hi jane. >> hi, tyler. kicking the drone down the road. including 55 billion for this year. people forget the pentagon already has about 55 billion in cut in 2013 even without sequester. i know folks getting pink slips. but it is said all of these cuts are not cuts to spending but to funding. meaning the industry wouldn't start to feel it until next year. where? a lot of analyst don't expect cuts to impact multiyear contracts for hardware just because it is too difficult. pentagon just signed two deals with lockheed martin worth almost $9 billion for the f-35. so what is vulnerable? >> i think that the things that will be impacted will be things like training, maintenance, services, those are the shorter lead time items that the dod will be able to control. >> so companies providing those to the service include caci. sai pch booz allen. in the meantime, they had a gre
cliff. hours to go until the deadline and as we get closer in theory, the pentagon is getting ready to layoff quite literally thousands of employees because of the automatic spending cuts that go into effect if no deal is reached in d.c. at midnight. we have more on that fall out, hunter? >> how you doing simon? ? yes, just to flush out a little bit of what ber that was talking about, is delaying the spending cuts, down to the wire of the fiscal cliff negotiations. it is an absolute must across the potomac river at the pentagon. there would be a $55 million in spending, about 10% cut in many programs while a lot could be delayed, the most immediate contingency is notifying an estimated 800,000 civilian employees about furloughs in the new year. south carolina senator lindsay graham after he was contacted by secretary of defense leon panetta. >> he says if we do that, it will shoot the defense department in the head and we will have to send out 800,000 layoff notices at the beginning of the year. he is worried to death if we don't fix he is sequester, this will hurt -- >> and there i
in and the pentagon will be forced to cut $9 million in spending. >> if lawmakers can't avoid the fiscal cliff, they may be able to avoid a different cliff, the dairy cliff. house and senate members appear likely to extend farm legislation for a year, a deal that would keep milk prices skyrocketing in january. we were worried about $6 gallon of milk. it could keep a decades old subsidy from coming back to life. the usda would be forced to buy milk at prices well above what farmers were getting now if the subsidy was revived. it could double the price of moib to $6.12 a gallon. >> markets have been reacting to each move on capitol hill, but obviously, things at this point are looking like the dow would open down by about 7.5 points. the dow is off 67 points and the nasdaq is down 14.75 points. all the surprised given the late hour that -- >> even if something doesn't happen today, it happens in two or three days. >> right. so if you were looking for a market reaction because a lot of the market iraqis we've heard has said, if highways the case, near not getting it base odd what they're going to
cuts kicking in. especially for defense. right now, the pentagon's looking at something in the neighborhood of a $55 billion cut in 2013, about 10% of its programs, and specifically, the "wall street journal," among others, reporting that the pentagon is making contingency plans to notify 800,000 civilian employees about possible furloughs. so this is front and center right now. and among those also sounding the alarm, senator lindsey graham after getting a call from defense secretary leon panetta over the weekend. >> last night at 7:30 during dinner, he said, lindsey, i'm told there's not going to be anything in this deal to avoid sequestration going into effect. >> there you have it in a nutshell. again, number one, we are getting hopefully a little more optimistic about either a short-term patchwork deal, setting the table for something bigger after the first of the year. but again, we've been talking primarily just on the tax side of the equation, the issue for the pentagon, the defense industry, and frankly, a whole lot of civilian employees, what about the sequeste
from the white house on this. here is former pentagon adviser michael rubin. >> thanks for having me, michelle. >> what should the white house do in response to this? >> ultimately, what with will have to be inspected and considered is the whole nature of the reset policy. if we trace the beginnings of this crisis back it actually started with the white house reaching out to vladimir putin to russia in supporting russia's accession to the world trade organization. the amendment which had govern the a lot of u.s.-russian/soviet relations going back to the 1970s had to be replaced. it was replaced in congress by the act which set russia's worst human viets violators there should be consequences when it comes to getting visas. vladimir mute indecided to lash out to the united states by pointing a figurative rifle at the head of russia's orphans. >> we improve russia's trade relation with us, officially and then he gets upset because buried within there is a little clause that says, as you point out, the worst human rights violators should have trouble getting into the united states. how
with the sequester? where are we on the pentagon cuts? >> nobody wants those pentagon cuts, including the president of the united states. there may be some on the left who would favor that. but that's not a dominant position. that's not where the political center of gravity is in the country. i think it's very likely that those sequester cuts are going to be turned off. now, remember the sequester, $1.2 trillion over the next nine years. that's a little over $100 billion a year. so half of that is defense, half of that is discretionary. the kick the can mini deal solution that we're talking about would identify some subset of spending cuts that would be the lowest hanging fruit still available that might turn off the sequester, or they could just turn off the trigger all together. the sequester exists because of a law passed by congress, another law passed by congress could change it. >> good to see you, john. thanks for the update. >> mastercard spending pulse saying it's the lowest level of 2008. high end is one of the areas getting hit hard. tom is managing director at the tellsee advisory group
over its price. but lockheed and the pentagon have come to terms to buy another round of the jets for nearly $4 billion. morgan stanley calls the f-35 the single most important investment debate over lockheed stock. second, cash will be king. as defense spending slows, analysts say many defense companies will reduce share buyback programs and conservative capital. and look to international customers to make up for lost business at home. third, it's a bird, it's a plane, it's big brother. as criticism rises over the use of drone strikes by the obama administration, look to see companies launching drone war at home for deals to build unmanned aircraft for domestic use. the faa says there could be 30,000 uavs in u.s. skies by 2020. the teal group says domestic drones could be worth $89 billion over ten years, as everyone from homeland security to tmz wants permission to use them. >>> let's get some more insight on the defense skprkt how to play it as the fiscal cliff deadline grows closer. howard rubel is with jeffries. great to speak with you. and i guess key to understanding the im
Search Results 0 to 6 of about 7